Deloitte faces complaint over advice prior to MG Rover bankruptcy
By Jonathan, 02 Feb, 2012. 0 Comments
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Deloitte LLP is facing a complaint from the UK accounting regulator for being unable to "consider the public interest" while advising on transactions which involved the now defunct UK vehicle company MG Rover Group. The Accountancy & Actuarial Discipline Board disclosed in a statement that Deloitte's conduct as well as a former partner "fell short of the standards reasonably to be expected." It further said that the company did not consider "the conflicts of interest and self-interest" when it advised both the car company as well as its parent company Phoenix Venture Holdings. The issue has been referred to an independent tribunal.
Deloitte commented that they disagree with the AADB, adding that they are "confident" that once all the evidence is considered, the tribunal will decide that there is no justification for criticism of Deloitte or its former partner. In 2005, MG Rover went bankrupt with 1.3 billion pounds (equivalent to $2.1 billion or 1.6 billion euros) of debt. Also, about 6,000 people lost their jobs that time. China-owned Nanjing Automobile Group (NAC) bought the MG Rover assets in July of the same year for around $97 million.
Another China-owned automaker, SAIC, failed in its efforts to bid for the asset after buying the intellectual property rights to sell the Rover 75 and 25 models in China. In 2007, SAIC combined with NAC and since then, it restarted small-scale production of MG models at the Birmingham factory of MG Rover. [source: Autonews]
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